₹ 78,704 crore due to States as GST recompense

Dues equal four months’ compensation, says Finance Ministry

The Centre is yet to remit ₹78,704 crore in outstanding Goods and Services Tax (GST) compensation dues to States, equivalent to four months of compensation under the indirect tax regime introduced in July 2017, the Finance Ministry said on Wednesday, citing ‘inadequate balance in the fund’.  

“The pending amount will also be released as and when amount from cess accrues in the compensation fund… Normally, compensation for ten months of April-January of any financial year is released during that year and the compensation of February-March is released only in the next financial year,” the Ministry said, noting that compensation for eight out of ten months of 2021-22 has already been released to States.

So far, the Centre has released ₹7.35 lakh crore to States since the introduction of GST, based on the Centre’s promise that States will be guaranteed 14% year-on-year growth over revenues in 2015-16 from the State levies subsumed into the new tax regime. The compensation period comes to an end in June 2022.